Friday Nov 19 2021

Senators angry with SBP chief over absence from panel meeting

State Bank of Pakistan Governor Dr Reza Baqir. Photo: file
State Bank of Pakistan Governor Dr Reza Baqir. Photo: file

ISLAMABAD: The Senate Standing Committee on Finance and Revenues showed a strong reaction over the absence of State Bank of Pakistan (SBP) Governor Dr Reza Baqir from a panel meeting and tore apart his letter, arguing that the panel could summon him by directing the police chief to ensure his appearance before the committee.

The Senate panel held its meeting under the chairmanship of Senator Talha Mehmood at Parliament House on Thursday, during which it also rejected most of the provisions of Tax Laws (Third Amendment) Ordinance 2021.

"I possessed powers to summon him, so will talk to the police chief and direct him to arrest the SBP governor and present him before us,” Senator Talha Mehmood said angrily when he found that the SBP chief was absent from the panel meeting.

The SBP governor was called by the Senate panel to appear before it with reference to a complaint made by Iraq’s ambassador about hindrances in operating a dollar bank account. The chairman of the panel had torn apart a letter that Dr Baqir wrote to seek absence from the meeting. But that letter never reached Parliament and was shown to the committee by a director of the SBP only when the committee showed its extreme annoyance.

"When the ambassador of a country shows up, it means a foreign government has shown up and yet the governor did not have the heart to come and attend the meeting," said PML-N’s Senator Dr Musaddiq Malik.

Senator Kamil Ali Agha, who belongs to the PML-Q, also strongly urged the committee chairman to move a privilege motion against the governor for his absence from the meeting.

The standing committee also directed the SBP to issue instructions to the concerned bank to accept dollar deposits from the Iraqi Embassy and resolve the issue within a couple of days.

Earlier, the Iraqi ambassador briefed the committee about the difficulties being faced while dealing with the bank. He stated that in Pakistan, the Iraqi Embassy is taking money in dollars and Pakistani Embassy in Iraq is also dealing in dollars on a reciprocal basis.

The Iraqi Embassy is providing all services, including visa services in dollars in Pakistan. He said that there are US$10 million deposited in the private bank for the last 10 years, while officials of the private banks stated that the embassies cannot keep dollars or any foreign currency in their accounts.

Upon this, the chairman said that the SBP should resolve this problem and directed the Executive Director of the SBP to speak to the governor and let the committee know about his response. After talking with the governor SBP, the SBP official conveyed the message of the governor to the chairman of the committee.

Senator Mahmood informed the committee that the governor SBP has assured the committee that the matter of the Iraqi Embassy would be resolved on a top priority basis. The issue would be sorted out in a week and the SBP will also have a meeting with the Iraqi ambassador to resolve their issues.

Proposal to share Nadra data with FBR approved

During the meeting, the penal cleared the proposal that the National Database and Registration Authority (Nadra) will share data with the Federal Board of Revenue (FBR) for broadening of the tax base, calculating indicative income and identifying potential tax evasion.

The Senate panel outright rejected most of the provisions of the Tax Laws (Third Amendment) Ordinance, 2021 including a mandatory condition for the corporate sector to switch over to the digital mode of payments from December 1, 2021.

While reviewing the Tax Laws (Third Amendment) Ordinance, 2021, the finance committee also rejected an enabling provision for making facilitator of the online marketplace to operate as a withholding agent under the Eleventh Schedule to the Sales Tax Act, 1990.

The committee also rejected the FBR’s powers for disabling of mobile phones or mobile phone SIMs, discontinuance of electricity connection and discontinuance of gas connection of persons who are not appearing on the Active Taxpayer List (ATL) but are liable to file returns.

The Senators approved the proposal to give legal cover to foreign remittances through Money Service Bureaus (MCBs), Exchange Companies (ECs) and Money Transfer Operators (MTOs), which would be considered as foreign exchange remitted from outside Pakistan through normal banking channels.

Originally published in The News